Imagine an expanse of dusty desert beside a greasy sea, sweltering under a pitiless sun. Now cover it with six-lane highways, flyovers, spaghetti junctions and all the nastiest buildings you have ever seen. Think Birmingham without its beauty, Las Vegas without its culture. Dubai is unquestionably the ugliest city in the world - there should be a socking great sign at the airport saying 'Abandon all taste, ye who enter here.' And yet it is the third most popular long-haul destination (after Barbados and Mauritius) for British Airways Holidays. Why?

Well, first, if you forget good taste, there is astonishing luxury to be had. I stayed at the Al Qasr, a new five-star hotel on Jumeirah Beach, which is described as 'the Venice of Arabia' because it has a couple of canals running through the gardens. (You soon get used to this level of hyperbole in Dubai - almost every building claims to be the eighth wonder of the world.) The first thing you see as you turn into the drive is a life-size herd of shiny gold plastic horses gambolling on the lurid lawns. But you don't have to look at them for long because dozens of staff come rushing out of the hotel to greet you like a long-lost cousin and offer you sweets and Arabic coffee.

The welcome is so warm that you can forgive the gruesome chandeliers and eye-grazing carpets in the lobby, though going to your room provides another shock - someone has gone to an immense amount of trouble to make it look exactly like a Sixties' Indian restaurant. But it is a very large room, with a supremely comfortable bed and well-equipped bathroom. In the end I almost became fond of it, though I did wake up every morning thinking, why maroon and orange stripes? And why those giant tassles on the television cabinet? It is a pity the design is so hideous because in all other respects the Al Qasr is a superb hotel - the food is delicious, the staff friendly, the service impeccable and it has a state-of-the-art spa called the Six Senses, which you reach rather charmingly by abra (boat) along the canal. It also has a delicious chilled swimming pool, which you do need in the Dubai climate.

The climate is Dubai's elephant in the room - nobody mentions it. The brochures talk of guaranteed winter sun and no rain and that is certainly true - the last measurable rainfall was in 1997 when it rained for a whole night. There have been one or two showers since then but you can safely forget your umbrella when packing for Dubai. And it's true that the sun's reliable, too - boiling sun, implacable sun, sun that will fry you if you go on the beach at midday. Even the locals admit that Dubai is intolerable in July and August.

I thought it was pretty intolerable when I went in September - the temperature seldom fell below the high 30s, even at night, and walking outside was like wading through soup. Despite being a desert country, it somehow manages to be humid as well.

Apparently, British tourists like Dubai (and went on going there right through the 1991 Gulf war) because, as the PR memorably explains, 'People don't associate it with the Middle East.' It doesn't feel like a Muslim country. You can drink alcohol even during Ramadan. The Dubaians, of course, look Arabic, in their immaculate white dish-dashes, but they account for only 18 per cent of the population - the rest are expats from all over Europe, India, Bangladesh, the Philippines, whose common language is English. It is also a very safe country, with no theft or mugging, and nobody ever hassles you in the street.

Dubai's main attraction is supposed to be its fabulous shopping, but I couldn't find anything I wanted to buy. There are loads of huge shopping malls with all the same shops as Brent Cross - Ikea, Next, Gap, Debenhams - with marginally cheaper prices. But you surely don't fly eight hours to get £3 off a skirt? The 'bargain' area, Karama, is more exciting if you crave fake watches and fake Louis Vuitton, Prada, Gucci, and Burberry handbags at dirt cheap prices. But can't you get those in Essex?

So what do you do in Dubai apart from shopping? Well first you have to see Burj Al Arab, which is Dubai's own Leaning Tower of Pisa - its silhouette appears on all the car number plates. It is, one might have guessed, a hotel, where the smallest suites cost £1,000 a night and guests are transported by a fleet of white Rolls-Royces. Designed by British architect W. S. Atkins, it is shaped like a sail and has a helicopter pad on top, where Tiger Woods was filmed hitting golf balls into the sea. The outside is great but the inside is like a bad acid trip. The style can best be described as Puff Daddy crossed with Wurlitzer jukebox, plus copious fish and waterfalls. The Royal Suite features a revolving bed and wall-to-wall leopardskin - apparently, the rapper 50 Cent stayed there the other week and loved it.

'Historic' Dubai does not take long to see. The oldest building is a tiny fort like a child's sandcastle, which dates from the l8th century and houses the Dubai Museum. Then there is Sheikh Saeed's house, built in 1896, and a few Persian windtower houses built in the early 20th century. That's about it for historic buildings. Someone pointed out to me the Hard Rock Cafe, a squat unimpressive block overshadowed by skyscrapers, and said it used to be a great landmark - you could see it from miles away as you drove down from Abu Dhabi, and it marked the end of the desert and the beginning of town. But that was all of eight years ago, and the city has engulfed it since then.

What is truly sensational about Dubai is the speed at which it is growing. You could go away for a week and return to find a 20-storey skyscraper outside your window. Housing estates and shopping malls arrive like flying ants. Sheikh Mohammed Al Maktoum, the Crown Prince, has decreed that by the time the oil runs out Dubai will be the financial and commercial centre for the whole Middle East. Three years ago he changed the law to allow foreigners to buy property and establish residency - hence the rush for real estate. Everywhere you go you see architects' drawings and models of the next new thing - the world's biggest shopping mall, the world's tallest skyscraper, the world's biggest maze. One of the new housing estates, International City, promises 'a recreation of the Forbidden City that will transport the magic of Chinese culture to the desert' - with parking for 2,000 cars.

The Dubai coastline is already almost totally built up, so now they are building artificial islands out into the Gulf, which will add 120 kilometres to the Dubai shoreline. The first of these, the Palm, is already visible: a man-made structure in the shape of a palm tree, it will have apartment blocks and hotels along the stem and private beachfront villas on the fronds (one of which David Beckham has acquired). Like everything in Dubai, it has been built at incredible speed - land reclamation started in December 2001 and finished in November 2003; now they are building a 10-lane bridge to the trunk, and the first houses are already going up. All the apartment blocks sold out in the first three hours.

Work has already started on a second Palm, which will be 40 per cent larger than the first, and there's also the World, consisting of 300 islands in the shape of different countries, which will be completed by 2008. Seventy islands have already been sold - someone bought Australia on the very first day. Owners can build what they like on their islands, or not build at all. The promotional video bizarrely shows people trekking through a rainforest and emerging on to a broad savannah with a herd of wildebeest stampeding by. Would anyone be mad enough to create a rainforest on a man-made island in the Gulf with no rain at all? Well, maybe in Dubai.

10 things you might not know

· Some Emirati men greet each other by touching noses and clicking their tongues while shaking hands - it's not recommended for foreigners to try this.

· A popular traditional instrument of Dubai, the manior, is a cotton belt decorated with dried goats' hooves, while the tamboura is a harp-like instrument featuring five strings, plucked with sheep horns.

· The Bedouin used to catch falcons by burying a 'volunteer' in the sand with only their head and an arm sticking out. They were covered with a bush with a live pigeon tied to it, then when the falcon was close enough, they had to grab it.

· As recently as 1952 there weren't any schools, and even today only primary education is compulsory.

· Women make up more than 40 per cent of the workforce, and in universities females outnumber males by three to one.

· If you run over a camel you must reimburse the owner for their loss.

· A decree was passed in 1993 banning children from the popular sport of camel racing, but children from India and Pakistan as young as eight years old are still used, albeit illegally, because they are so light.

· Dubai has a huge problem with people dumping rubbish on the streets, and generates one of the highest volumes of waste per capita in the world.

· Population estimates are around 1.1 million, of which only 220,000 are Emiratis, the rest are expat.

· There are no political parties or elections, the royal Al Maktoum family rules, currently Sheikh Maktoum bin Rashid Al Maktoum is in power, supported by his two brothers.

Factfile

Lynn Barber travelled to Dubai with British Airways Holidays (0870 243 3407, ba.com/holidays). Five nights at the Al Qasr hotel in Madinat Jumeirah, Dubai, costs from £1,317pp until 30 November 2004, including return British Airways flights Heathrow-Dubai, free domestic connecting flights from most regional UK airports, accommodation with breakfast, and private transfers.

For further information, contact the Dubai Department of Tourism and Commerce on 020 7839 0580 or see dubaitourism.ae